Mega Nirman (539767)

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Sales grew 21.01%, showing some ongoing business activity.
• Piotroski F-Score of 7/9 suggests recent improvement in financial health.
• Profit growth of 227.27%, though from a very low base, indicates a possible earnings recovery.
• Latest quarter revenue of ₹6 Cr shows the company is executing projects, not dormant.

Concerns

• P/E of 1000 and PEG of 8.06 make the valuation impossible to justify on earnings.
• ROE of 0.79% and ROCE of 0.84% mean capital is earning almost nothing.
• Latest quarter net profit of ₹0 Cr provides no underlying earnings support.
• Current price of ₹17.35 is below the stated 52-week low of ₹20, raising data or distress concerns; no dividend; promoter holding and debt/equity are undisclosed.

AI Analysis

Let's start with earnings, because in the end every share is a claim on earnings. Mega Nirman earns almost nothing. A P/E of 1,000 and an ROE of 0.79% mean this business generates less than one rupee of profit for every 100 rupees of equity. Book value is ₹4.76, yet the market price is ₹17.35 — 3.64 times book. Paying that kind of premium for a company earning 0.79% on equity is not investing; it is hope. The latest quarter adds no comfort: sales of ₹6 crore but net profit of ₹0 crore. Revenue rose 21%, and reported profit jumped 227%, but that percentage is meaningless from a negligible base. The PEG ratio of 8.06 suggests the growth is already priced in many times over. I do see some positive signals — the Piotroski score is 7 out of 9, which points to improving finances. But in a cyclical real estate business, a single project cycle can temporarily flatter the numbers. There is no dividend; promoter holding and debt/equity are not disclosed; and the FairStock score is unavailable due to insufficient data. I cannot evaluate management quality or balance sheet risk when basic data are missing. Worse, the stock trades at ₹17.35, below the stated 52-week low of ₹20. That may be a data error, but it is another yellow flag. A ₹6 crore market cap is also a micro-cap, easily moved by speculation. In Graham's language, this is not a business with a margin of safety. It is a cyclical, project-driven small-cap with no durable moat and no meaningful earnings. I would keep it on the watchlist, but not in the portfolio.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer